Hostess gets court OK to shut down operations

WHITE PLAINS, N.Y. | A bankruptcy court judge on Wednesday approved a request by Hostess Brands Inc. to begin winding down its operations.

The ruling came Wednesday after the maker of Twinkies, Ding Dongs and Wonder Bread failed in last-ditch negotiations to end a strike by its second-largest union.

Hostess now has the green light to terminate the jobs of its 18,000 workers without risking legal action, and to sell off its brands.

In court Wednesday, Hostess said it needed to begin the liquidation process quickly to take advantage of outside interest in its brands, which a banker said could fetch up to $2.4 billion.

That’s about how much Hostess generates in annual sales.

The banker, Joshua Scherer of Perella Weinberg Partners, told the court that interest in Hostess’ brands has come from companies ranging from regional bakers to major national retailers that have long sold Hostess products.

“This is a once-in-a-lifetime opportunity to get iconic brands separate from their legacy operators,” Scherer said during the bankruptcy-court hearing in White Plains, N.Y.

Hostess, based in Irving, Texas, also wanted to quickly shutter its business, because has been spending about $1 million a day in payroll without any income since it halted operations last week.

CEO Gregory Rayburn said the company will send out termination notices to its employees.